Legal Q&A: Lapse of licence, bankruptcy and extension of hours

Lapse of licence​

Q: I am presently in the process of buying the freehold of a pub as a going concern to add to our portfolio of classic country pubs. Everything was going well with the negotiations until my property lawyers discovered the company from whom we are buying the pub was dissolved a few months ago. It is this company that held the premises licence. Does that mean the licence has lapsed and if so, why is the pub still trading?​

A: If the holder of the premises licence is a company, and that company is dissolved then, yes, the premises licence does lapse from the moment of dissolution.

It is quite possible that the licensing authority and police are unaware the company has been dissolved, and the directors unaware of the impact of dissolution on the licence.

The business could indeed still be profitable – dissolution can sometimes happen simply because the company has not filed the appropriate documents with Companies House. However, you do have a problem clearly because the licence does indeed appear to have lapsed and the 28-day period for reinstating it by way of a transfer to another individual or company has long passed.

Depending on how much you want the pub, there are options that could be considered, which might even include the sellers applying to restore their company to the register, which case law suggests has the effect of treating both the dissolved company and the licence to have never dissolved/lapsed in the first place.

Alternatively, a new licence may need to be applied for. These are all very complex legal issues and with the stakes so high I strongly advise you to seek specialist legal advice from licensing experts who can liaise with your existing advisers and the sellers to try and resolve the situation.

Alternatively, you might just want to find a different pub to buy with a less troublesome history of ownership.

Bankruptcy and my licence​

Q: I am about to be made bankrupt – will my personal licence lapse?​

A: No. Your personal solvency does not affect the validity of your personal licence. However, if you hold a premises licence then, if you were made bankrupt, that premises licence would lapse. You need to make arrangements before you are made bankrupt to transfer a premises licence.

Extension of hours​

Q: I run a late-night bar and have made an application to extend my hours. My main competitor owns flats nearby and not only have I had an objection from him but also from the occupants of the flats. There is no detail in their objections, simply saying that my bar is really noisy and has loads of incidents. I am sure they are doing this just to stop me getting my extra hours but is there anything I can do? The police and environmental health have told me they are not going to object.​

A: Objections (‘representations’) must not be frivolous or vexatious. ‘Frivolous’ basically means silly and ‘vexatious’ means designed to cause you harm.

I would initially speak to the licensing authority and express your concerns because it has a duty to vet all representations, including whether they are frivolous or vexatious.

However, the Government guidance recommends that in general licensing authorities give people who make representations the benefit of the doubt and then if the matter goes to a hearing, the truth will out, as they say.

Either way, I strongly suggest you continue to act professionally and courteously and seek legal advice – if these representations are as vague as you describe then the licensing sub-committee is unlikely to give them much weight.